Prepare your retirement and inheritance — before life decides for you
In 4 min you'll know: how to review beneficiaries, policies and your will at least once a year
In Block 1, Lesson 6 we discussed long-term saving and the importance of starting early. In Block 2, Lesson 9 we addressed the (retirement savings plan with tax incentives) as a retirement instrument and insurance-based protection. This lesson brings it all together and goes further: retirement is not just about having money — it is about having the right money, in the right instruments, with the right beneficiaries, and a plan for when you can no longer manage any of this on your own. The rule: review your beneficiaries, insurance policies and will at least once a year — and after every significant life event.
Before you continue: if you have automatic savings running, what happens to that money if something happens to you — is it protected?
(Answer in the next paragraph.)
Retirement in Portugal does not begin when you stop working — it begins when you start contributing. What you will receive from Social Security depends on two factors: your retirement age (66 years and 4 months in 2025, with early retirement possible at a penalty) and your total years of contributions (minimum 15 years to qualify for a pension). The average Social Security pension in Portugal is around €500–€600/month — insufficient to maintain most people's standard of living. This is where the PPR, complementary pension funds and personal savings come in.
The PPR remains the most efficient instrument for supplementing retirement in Portugal, for two reasons: the annual tax benefit (up to 20% of contributions, with caps of €400/€800) and the reduced taxation at the reimbursement stage (8% on the accumulated amount if the plan is over 5 years old and reimbursement occurs after retirement age). But the PPR has a feature many people are unaware of: it allows you to name beneficiaries in the event of death, functioning as an alternative or supplement to a will for this specific amount.
The senior phase introduces three variables most people do not plan for: (1) dependency — the probability of needing long-term care increases significantly after age 75, and a care home in Portugal costs between €1,500 and €3,000/month; (2) incapacity management — if you lose the ability to manage your financial affairs, who does it? Joint asset administration or a power of attorney should be arranged before they are needed; (3) inheritance — without a will, inheritance follows the rules of legitimação (spouse, children, parents), which may not reflect your wishes. The (Portuguese insurance and pensions regulator) supervises life insurance and pension funds that complement this planning.
Notice: Mowei is a financial education and comparison platform. We are not investment advisors authorised by the CMVM (Portuguese securities market regulator), nor insurance intermediaries authorised by the ASF. This lesson is general information, not personalised advice. For decisions on PPR or other investment products, consult an intermediary registered at investidor.cmvm.pt; for decisions on life insurance or pension funds, consult an intermediary registered at www.asf.pt.
Schedule your annual review of beneficiaries and policies (2 min) →
Your promise: This quarter, I will review beneficiaries, insurance policies and will — and schedule the next review.